A case that has been fought out in the courts for 10 years has finally reached its conclusion. Last week, NGS Global executive recruiter, David Nosal, reported to the federal prison at Atwater to begin serving a 366-day sentence.

March 21, 2018 – David Nosal, the onetime star Korn Ferry recruiter who was convicted of violating a federal anti-hacking law, has exhausted his decade-long efforts to stay out of prison and reported to the federal penitentiary in Atwater, CA on March 14.

Mr. Nosal, who left Korn Ferry to found NGS Global, was charged back in 2008 with violating the Computer Fraud and Abuse Act and the Economic Espionage Act. He was accused of working with employees at his former firm to steal source lists, and in 2013 was convicted by a jury and sentenced to one year and a day in prison. He was also sentenced to three years of supervised release and community service along with fines of $60,000.

Mr. Nosal, who had been a top biller for Korn Ferry for years, never actually accessed the stolen files himself. A former colleague of Mr. Nosal’s, at his urging, is said to have passed along her computer password to two fellow employees who planned to go into business with Mr. Nosal. They, in turn, downloaded the documents, in 2004 and 2005.

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Conviction Stands

“At the end of the day, stealing is stealing, whether you use a crowbar or a computer,” said assistant U.S. Attorney Kyle Waldinger at the time.

At Mr. Nosal’s sentencing, the defense argued that he should receive probation. “A very powerful, rich corporation did not suffer any meaningful loss,” said attorney Dennis Riordan. Mr. Nosal himself, while saying he was “so very sorry this happened” at his sentencing, has exhibited little repentance to this day.

Since his conviction, Mr. Nosal has been free pending appeal and operating a search firm that competes against his former employer, Korn Ferry, among many recruiting outfits. A number of charges against Mr. Nosal were thrown out, including an order that called for Mr. Nosal to pay Korn Ferry restitution. Still, the U.S. Court of Appeals for the Ninth Circuit upheld charges of violating trade secret and computer fraud and abuse laws. The recruiter’s legal team then turned to the U.S. Supreme Court, but in October the court let his conviction stand without comment.

A Deterrent

At Mr. Nosal’s sentencing, prosecutor Matthew Parrella told U.S. District Judge Edward M. Chen that the sentence he gave Mr. Nosal would serve to send a message to others seeking to steal trade secrets and “will go through Silicon Valley like a bell.”

Spencer Stuart Brings Lawsuit Against Recruiter and Korn FerrySpencer Stuart filed a lawsuit against its former global automotive practice leader, Francois Truc, and the rival search firm he joined last month. According to the suit, Mr. Truc and Korn Ferry “are attempting to dismantle Spencer Stuart’s global automotive practice and move that business lock, stock and barrel to Korn Ferry.”

In January, Mr. Nosal’s attorney, Steven F. Gruel, asked the U.S. District Court in San Francisco to reduce or set aside his sentence, but that too was rejected. Mr. Gruel’s argument, considered by many to be a “Hail Mary” attempt, pointed out that Mr. Nosal’s case was supposed to have been a deterrent to such crimes. But, said Mr. Gruel, Korn Ferry had recently hired someone accused of the same crime as Mr. Nosal and sought no criminal charges in that case.

Mr. Nosal also argued that by going to prison, he would essentially be denied his right to further appeal, because he would have served his sentence before any such appeals could be settled. “Even if the Court assumes in Mr. Nosal’s favor, that ‘the appeal is not for the purpose of delay,’ he has failed to raise ‘a substantial question of law or fact,’” wrote Judge Chen in his denial last Tuesday.

The federal Atwater facility, 115 miles from San Jose, includes a high-security prison that houses nearly 1,200 inmates. The adjacent minimum security station camp, where Mr. Nosal is being held, has about 110 inmates. Now incarcerated, his Atwater penitentiary registration number is 12039-111.

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Carin Jacobs

In the Executive Search business this is something that is not uncommon. It has happened to me as well and at least 4 Search Firm owners I know. My losses were in the 7 figures and it is in litigation as well. The man who took all of my clients and candidates opened a brand new niche division which is essentially my entire business and had a huge press release as well. I did not press criminal charges, yet my statute of limitations allows me time to decide if I want to move forward with criminal prosecution. It is not… Read more »

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4 months ago

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ANONYMOUS

For anyone who has worked for the convicted felon, he deserves 20 years in the pen. He orchestrated the entire database dump of search assignments from K/F. Not one of those three individuals did it on their own — it was all at the behest of the felon, and one was his ex-fiancee while the felon was still married. The felon has never taken ownership of the lives he destroyed except for his award-winning performance during the sentencing stage. He refuses to accept responsibilty for what was done. His verbal abusiveness towards employees, lying to clients and prospective clients, and… Read more »

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9 months ago

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Tim Hicks

Wow. Lot’s of Nosal-haters on this site. I’m not a huge fan of him either but I’ve read his website – thetruthbehindthenosalcase – where he makes a number of points that sound legitimate to me. And he uncovers some of the hypocrisy shown by firms and their dealing with bad actors in the industry. In short, firm’s have overlooked a lot more egregious sins than David committed.

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9 months ago

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Anonymous

Tim, you might want to actually read the facts of the case instead of just what you hear on Nosal’s site. He leaves out a LOT of the facts that were shown at trial – most of those facts are proven by electronic data trails. If Nosal really wanted to lay out all the facts, he’d post those trial transcripts (which are publicly available to anyone) and supporting documents along with the 9th circuit’s full opinion. Then let people decide. Until then, you have to treat whatever he says with suspicion. He makes it sound like it was just a… Read more »

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9 months ago

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Tim Hicks

You’re making the assumption that I’ve not done more reading on the case – which isn’t true. In no way am I suggesting David is innocent but I am intrigued by the rest of the story.

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9 months ago

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Anonymous

With all of the people in the industry that hate Nosal, I am surprised you would volunteer your name as a defender of the indefensible (David Nosal).

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9 months ago

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Anonymous

Tim, you sure you’re not a Nosal fan? Kind of sounds like it.

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9 months ago

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Tim Hicks

Since there is no way to prove or not prove my views on David I’ll just let you have your opinion. David and I were both on Win Priem’s leadership council back in the day so I’ve seen both the good and the bad of him. His actions and reaction to the legal action don’t surprise me.

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9 months ago

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Anonymous

it happens all the time in our industry and so happy to see that action was taken after all we invested in the company and staff in our own businesses to see them steal away what we have built, it was time for action